I recall a few years back seeing a Bud Neil
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cartoon showing two men standing alongside a computer. One was looking dejected, the other half-smiling and holding an oil can was saying: -Don't worry, Willie, just as long as it can't tell the difference between oil and water we still have a job." The cartoonist was looking at man's future in the computer age and surely his belief in the importance of the individual has been fully justified.
It certainly was fully justified for me when I visited the highly computerized plant of General Foods Ltd. at Banbury, 70 miles north-west of London. Here man has the first and last say, and the computer, like the accountant, the 0 and A man and the work study officer before it, is recognized as a tool of management and is not in itself management.
General Foods manufactures and distribute coffee and desserts throughout Great Britain. It has a distribution manager and a transport manager, 10 drivers, a network of carriers and a computer. It has neither vehicles (they are on contract hire) nor storage space. The stock at Banbury takes 3 weeks to rotate; from the moment it is produced a packet of custard, miracle whip or instant coffee will be in existence a maximum of 21 days before it reaches the retail outlet. The accent then is on speed, reliability and cost. You may have heard these terms before; if not, you certainly will in the future.
In 1968, after General Foods moved from Birmingham to Banbury as part of its expansion programme, the company made a critical examination of its distribution organization, covering every imaginable detail. First, Mr Albert Chilton, distribution manager, fed into the computer the total traffic for 1967 and at the same time he divided Great Britain into 10 kilometre grids. He asked the ,electronic brain to produce delivery volumes for each 10km square.
Following this exercise. the "box" was asked to indicate individual orders in each square in units of up to 10 packets 50, 100, and 1,000 and over. This showed where the heaviest delivery areas were located.
The management then considered warehousing and asked the computer to locate 14 depots throughout the country in ideal operational and economic locations. It was then asked to locate 13, then 12, then 11 and so on down to one.
"If we only wanted one depot for ideal distribution in Great Britain, where should it be? That was the last question fed in-and you've guessed the answer. Well, it wasn't quite Banbury but it was a spot only 10 miles north.
This not only confirmed an earlier man-made decision, but also set the pattern for the distribution of 1,000 daily orders. This is a pattern which could change but is unlikely to do so while General Foods holds it place in the retail market.
Having had previous experience of owning and operating vehicles, General Foods decided against it for this new depot, and instead entered into a contract with BRS (Contracts) Ltd. The contract fleet is 10 AEC tractive units and 20 Boden semi
trailers. Carrying capacities vary between 14 and 18 tons, but as Mr Peter Shirt, the transport manager, pointed out: "Volume, not weight, is our problem."
These 10 units, and a few others hired in from local carriers, transport all of the GF home sales to 21 retail areas in Great Britain. In addition to trunking, these vehicles carry 28 per cent of the company's direct orders.
From the moment a retailer passes an order to one of the company's salesmen no more than seven days will elapse before delivery is effected. The order is passed to the customer service department at Banbury either directly or through the sales offices at Manchester, Birmingham and London. They may be sent by post, te,lephoned or telexed.
Whatever the method used they are channelled into the computer room by 5.00 p.m. on the day of arrival. One hour later the transport instructions are produced.
The following morning the transport department staff examine the instructions and decide on the action. The computer supplies the information; it is the transport manager who decides how it will be used.
Three courses are open to him. He can send the consignment direct to the customer on one of his trunk vehicles, he can deliver it into the distribution network, or if it would prove uneconomic to do either he can "feed" it back into the computer until delivery becomes an economic proposition.
If the first choice is accepted the direct delivery usually becomes a part load in a trunk vehicle; the rest of the load is bound for the distribution network. This accounts for only 28 per cent of the total.
The remaining 72 per cent reaches the retail outlets in the most intriguing way. Do you remember the nursery game with the rhyme "Ride a cock horse to Banbury Cross etc.?" Well, they are still playing games at Banbury, only now they call it the distribution game and there are prizes for the winner. There is another angle to it, too: everyone who plays can win.
General Foods employs 21 carriers throughout the country to deliver the packages which have been trunked to their premises. The goods are transferred from one of the G.F. contract vehicles into one or more of the local carrier's vehicles. Shop deliveries could be one or 100 cartons and so frequently the Banbury goods are only a small part of a full load carried by the local men.
To ensure that the goods are not left on a loading bank or carried around in the back of a van for days, an incentive scheme has been introduced.
If 90 per cent of the goods handed over to the carrier in a month are delivered within 48 hours of receipt the carrier earns a bonus payment. There are additional payments for improvements over 90 per cent up to 100 per cent. It is important to point out that the delivery period does not begin until the day after the carrier has received the goods. This means he has on occasions one extra slay to earn bonus, dependent on when he takes delivery from the trunk vehicle—it could be a.m. or p.m. If it is a.m. he has a spare day in which to effect delivery. This is a swings-and-roundabouts aspect of the operation. Allowance has also been made for Sundays and public holidays, but not for local holidays.
When the local carrier takes over the goods he receives three documents, a customer advice note, a customer receipt which the carrier retains, and a proof-of-delivery note.
The entries on all three notes are identical except that the receipt note has the customer's signature after delivery and the POD is dated by the carrier when he receives the goods and by the customer when he takes them from the carrier.
Dated PODs are returned to Banbury and fed into the computer each month by areas. The computer takes over and pro duces a league table which shows the area, how much of the total was delivered in day one, how much by the end of day two, and how much by the end of day three.
If the day two total exceeds 90 per cent the appropriate bonus is automatically added to the carrier's next account. The league table also shows the percentage which did not reach the shop. This is attributed to breakage, loss or pilferage. Breakages can be accounted for because the packages are returned to Banbury; the balance is attributed to pilferage because loss usually amounts to that_ There may be some social significance in the "Short delivered" column of the computer printout in that the highest percentages appear to come from those areas with the highest unemployment figures.
Each carrier receives a copy of the printout but he can recognize only the entry applicable to him. There are no names, only code numbers, and these are known only to General Foods and the carrier involved.
Those who earn bonus payment receive a congratulatory letter from the company. Those who don't quite make it get an encouraging word and those who are persistently low, after a time, get the push.
Happily this latter situation is not a common occurrence but General Foods is prepared. For every carrier it employs there is at least one in reserve, but while the carrier is proving satisfactory he has the exclusive delivery rights for his area, apart from that done direct from Banbury in the hired or contract vehicles.
This is a further example of management using the computer tool to advantage. There is no question of the distribution at General Foods being run by an electronic brain. It does provide information to aid management decisions about whether or not a carrier will be retained.
General Foods transport function is controlled by a budget and each day Mr. Shirt knows his financial position. The computer shows whether or not his staff made the correct decisions the day before. It doesn't show where they went uwng, just by how much. It's Mr. Shirt's task to analyse the computer information and in the light of his analysis the staff makes its decisions on subsequent occasions.
When operators' licensing is introduced early next year General Foods will have to hold a licence for the 10 BRS vehicles, because it employs the drivers. Mr. Shirt will be specified as the transport manager. How does he feel about being held responsible for the serviceability of vehicles which are serviced outside his control? "I don't mind at all," he told me, "I know that the standard at BRS Banbury is high."
I was persistent. "It may not always be so," I said. "People change, so do systems. Will you always be able to feel so confident?"
He thought for a few moments then said reflectively: "You've got a point; perhaps I should ask BRS to certify the fitness of each vehicle after every service."
"Excellent," I said--"in writing." Well, you can appreciate the position; times are changing in the contract hire business for both parties.